Insuring older travellers

ITIJ 211, July 2018
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With more older travellers seeking adventure, and an increasing number of people suffering from pre-existing medical conditions, ensuring access to appropriate cover for these groups is an important aspect of the insurance industry’s role. Mandy Langfield rounds up the latest developments surrounding the efforts of insurers and industry bodies to widen access to insurance products
 
Last year, on 4 October, the UK’s Chartered Insurance Institute (CII) hosted a roundtable with insurance professionals, a cancer charity and the Financial Conduct Authority (FCA) to discuss the issues around this area. The purpose was to understand the technical problems and identify some possible approaches both the regulator and the professionals could take. The roundtable identified broad categories of issues where action was needed:
-Commoditisation of retail lines. Commoditisation benefits ‘mainstream’ consumers in that they facilitate access to simple and relatively cheap products through a straightforward buying process through price comparison websites. This could lead to ‘non-mainstream’ consumers being potentially excluded from cover. Longer-term travel policies might help by attracting consumers who are healthy at the time of application, even though their situation or circumstances could change during the policy period. 
-Consumer understanding/decision making. Improving transparency over what is and is not covered should help reduce surprises for customers, as will encouraging and educating consumers to think about insuring the holiday prior to final booking. To facilitate this, the CII is working with initiatives such as Travel Insurance Explained, a website aimed at educating consumers about their policies.
-Signposting to specialist brokers. Charities could provide a signposting service if the technology was available for them to keep it up to date with low resource/cost. Alternatively, aggregators specially designed for people with pre-existing medical conditions. 
Perceptions of what is ‘fair’. More transparency in risk screening and consistency of approaches to cancer patients in remission and how this affects the risk. 
 
Recent developments
At the end of June, the FCA published its feedback on a Call for Input it made last year on access to insurance for people with pre-existing medical conditions. The FCA was concerned about how difficult it was for some customers to find the right insurance at a reasonable price, with the result of this concern being that the organisation is going to work with key industry stakeholders to create a new service that will direct customers to specialist providers that will be able to meet their needs. Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said: “People with pre-existing medical conditions feel poorly served by travel insurance. There are specialist services out there, but, often, people don’t know where to find them. We’ll work with industry to point people in the right direction and help dispel some of the myths and misunderstandings to ensure this market works better. This will also form part of our continuing work on insurance pricing practices, which are designed to lead to long-term positive changes across the market.”
The CII is one of the stakeholders that has been working with the FCA on its consultation. ITIJ spoke to Melissa Collett, Professional Standards Director of the CII, about the perceived problems consumers have with accessing insurance. She pointed out that at least 15 million people in the UK are currently living with at least one long-term health condition, a figure that is expected to rise to 18 million within 10 years. 
“Although many people living with cancer and those in remission are living healthy lives,” she said, “some are prevented from travelling because they cannot get insurance, or worse are forced to risk travelling without it. This highlights the need for consumers to seek specialist advice if they have pre-existing conditions to ensure they have cover that meets their specific requirements. However, it can be difficult for many consumers to find the specialist advice they need. Improving signposting would help enable more people to be covered for the moments that matter.” The FCA paper, she concluded, provides an opportunity for insurers not currently providing adequate signposting services to begin to do so.
The aforementioned ‘industry stakeholders’ with which the FCA will carry out its mission include the British Insurance Brokers’ Association (BIBA). BIBA has already been heavily involved in signposting (directing customers to appropriate companies who can cover their conditions), with over 100 of its members being specialists in this type of insurance. Executive Director Graeme Trudgill noted: “We have been calling for wider signposting in our Manifesto to help customers and improve financial inclusion. We have long identified that the biggest challenge is awareness, and that more providers need to actively engage in signposting. We believe that BIBA has a leading role to play because we have specialist insurance brokers in our membership with the insurance solutions that customers need, and improved signposting will enable more customers to access cover.”
 
Not going far enough?
Another significant stakeholder area is the charitable sector. Macmillan Cancer Support’s Executive Director of Policy and Impact Fran Woodard said of the news of the FCA’s intentions: “We welcome commitments today from the FCA to work with providers to make it easier for people with cancer to find suitable travel insurance, but we are disappointed that these proposals do not go even further. Improved signposting will only benefit people with cancer if, at the end of it, there is fair and affordable cover available.” 
So, not good enough then, as Woodard continued to explain: “No two cancer experiences are the same and if travel insurers want to meet the needs of people with cancer, they must update their oversimplified medical screening to reflect this. We are concerned that, despite these proposals, many will still be faced with limited choice and disproportionately high premiums. We look forward to working with the FCA and the insurance industry to ensure that these proposals are as effective as they can be for people with cancer. But insurance policies should be clear and fairly priced for everyone, and we will continue all our efforts to achieve this.”
Some progress, then, which is good to hear – but there still remains a lot of ground to cover. ■